PERFORMANCE MANAGEMENTHow does your organization measure up?

MMeeaassuurree tthhee eeffffeeccttiivveenneessss ooff cchhaannggeess aanndd lleeaarrnn lleessssoonnssttoo ddrriivvee ccoonnttiinnuuoouuss iimmpprroovveemmeenntt

AArree yyoouu rreeaallllyy mmaannaaggiinngg ppeerrffoorrmmaannccee??

IInn ttooddaayy’’ss ccoommppeettiittiivvee aanndd rraappiiddllyycchhaannggiinngg wwoorrkkppllaaccee,, eennssuurriinnggooppttiimmuumm iinnddiivviidduuaall,, tteeaamm aannddoorrggaanniizzaattiioonnaall ppeerrffoorrmmaannccee iissccrruucciiaall,, yyeett mmoosstt oorrggaanniizzaattiioonnss hhaavveeppeerrffoorrmmaannccee mmaannaaggeemmeenntt pprroocceesssseesstthhaatt,, aatt bbeesstt,, hhaavvee lliittttllee oorr nnoopprroovveenn iimmppaacctt..

““CCoommppaanniieess wwiitthh yyeeaarr--rroouunndd ppeerrffoorrmmaanncceeaapppprraaiissaall ssyysstteemmss ssiiggnniiffiiccaannttllyy oouutt--ppeerrffoorrmmccoommppeettiittoorrss llaacckkiinngg ssuucchh ssyysstteemmss iinn ffiinnaanncciiaallmmeeaassuurreess,, ssuucchh aass rreettuurrnn oonn eeqquuiittyy,,ssttoocckkhhoollddeerr rreettuurrnn,, ssaalleess ggrroowwtthh aannddccaasshhffllooww..””BBoossttoonn CCoonnssuullttiinngg GGrroouupp

Organizations are falling into some commontraps:

� Many processes focus primarily on fillingout forms to record history rather than onenhancing sustainable performance tobuild a better future.

� Processes that are claimed to motivateand guide staff are, more frequently thannot, viewed negatively by the very peoplethey are designed to influence.

The list of negative symptoms is seeminglyendless, but with thought, conviction, effortand technology support, those ills can betreated.

Pilat HR Solution’s international consultingpractice has invested more than 30 years indeveloping and implementing cutting edgePerformance Management processes.

Our global HR software division facilitatesthe support of such processes through ourleading web-based PerformanceManagement software, Performance Pulse™.

Effective solutions to the classic PerformanceManagement shortfalls are now available andcan deliver:

� Organizational performance monitoring.� Automated process management.� Quality definitions/plans of individual

performance.� High levels of individual commitment to

performance plans.� Strict alignment of individual performance

plans with organisational goals.� Integration of plans for outputs activity/

behaviour and development.� Continuous performance improvement.� Dynamic plans; responding to changing

demands and circumstances.� Valid, reliable, differentiating and useful

assessment data about people, their jobsand their performance.

TThhee pprroocceessss

BBaasseedd oonn eexxtteennssiivvee rreesseeaarrcchh aanndd oouurroowwnn aannaallyyssiiss,, PPiillaatt hhaass iiddeennttiiffiieedd tthheeccoorree ccoommppoonneennttss iinn eeffffeeccttiivveeppeerrffoorrmmaannccee mmaannaaggeemmeenntt;; tthhoossee tthhaattlleeaadd ttoo ssuussttaaiinnaabbllee hhiigghh ppeerrffoorrmmaannccee..

While each element below is important andunique in driving performance, the processdiagram must also be viewed as a whole,where the interlinking and continuouselements work together.

To truly improve individual andorganizational performance, you shouldconsider each element individually andtheir inter-relationship within the contextof your organization.

KKeeyy PPeerrffoorrmmaannccee FFaacciilliittaattoorrss

SSeettttiinngg DDiirreeccttiioonn

Direction Setting is the process wherebyhigher level goals, plans and organizationalvalues are both set and communicated downthrough the organization. At the highestlevel, the formal descriptions typicallyinclude the vision, mission, strategy andvalues. At other levels, they are made up ofDivision Plans, Department Plans andCorporate Initiatives. Nearer to individuals,they may include ‘my boss’ goals’, ‘what ourteam is expected to achieve’, ‘what thevalues look like in my role’ and ‘theleadership competencies’. Employees areclear about what is expected of them andwhy.

CCllaarriiffyyiinngg RRoolleess

Clarifying Roles takes two forms:

1. Clarifying each individuals responsibilitiesin relation to their day-to-day role.

2. Defining each individual’s responsibilitywithin the organization’s performancemanagement processes and system.

PPllaannnniinngg && AAlliiggnniinngg

Improved direction setting and role clarificationincrease the chance that individuals are clear aboutwhat is expected of them. The next step is tocreate detailed individual performance plans andensure that these are tightly aligned to maximisethe collective performance. Individual performancecomprises three elements:

� OOuuttppuuttss ((GGooaallss//OObbjjeeccttiivveess//KKPPII’’ss)) –– TThhee WWhhaatt..Effective Performance Planning articulatesorganizational key performance indicators (KPI’s)in the form of individual SMART (Specific,Measurable, Achievable, Relevant and Time-bound) objectives. The number of goals and levelof detail varies from organization to organization.Measures can include quantity, quality, use ofresources and timeliness.

� AAccttiivviittiieess//BBeehhaavviioouurrss –– TThhee HHooww..Two key elements having established the goalsare:

� Be clear what activities are required(tasks) to enable goal achievement.

� Identify the behaviours that will supportthe organizational values/competency modelsthat you would wish to be displayed in carryingout the tasks, and which support excellentperformance.

This makes it clear for individuals the requisitesteps to achieve desired performance and make anappropriate contribution to organizational culture.

� DDeevveellooppmmeenntt –– TThhee GGrroowwtthh..Individuals identify the changes in knowledge,skill or attitude that are required to deliver theobjectives and plan a practical way of achievingthis.

KKeeyy PPeerrffoorrmmaannccee FFaacciilliittaattoorrss

MMoonniittoorriinngg && MMeeaassuurriinngg

This is the process via which we trackprogress and produce meaningful data onwhich to base change. It brings objectivity toan otherwise subjective process; laying thefoundation for evaluation and appraisal.

� Measurements of outputs typically includequantity, quality, use of resources andtimeliness (against planned interim andend-points).

� Measurements of behaviour anddevelopment cover frequency, extent andquality.

� Measurements of the process typicallyinclude compliance, satisfaction andreturn on investment.

EEnnaabblliinngg && EEnnhhaanncciinngg

The real purpose of PerformanceManagement is to increase performance;‘Enabling and Enhancing’ focuses on thisimprovement dimension, addressing thecritical performance factors of:

� CCaappaabbiilliittyy – training, coaching,equipping.

� OOppppoorrttuunniittyy – access, resources, space/empowerment.

� IInncclliinnaattiioonn – recognition, reward,opportunities.

AAsssseessssiinngg && EEvvaalluuaattiinngg

While Performance Management, notPerformance Assessment, produces increasedperformance, Performance Assessment is stillcritical.

Without valid, reliable, differentiating,comparable and useful assessment data, HR isunable to develop truly fair and meaningful HRdecision support tools for such processes asSuccession Planning, Development Planning,Talent Pool Management and PerformanceRelated Pay.

‘Assessing and Evaluating’ is the step viawhich measurement data is accumulated,reviewed and compared with plans to arrive atmeaningful judgements. Circumstances,challenges and other potentially distortingfactors are taken into account.

RReewwaarrddiinngg && RReeccooggnniissiinngg

Few people are motivated primarily by money;however, most individuals’ minds become morefocused on issues when the importance of themis underpinned by some potential reward orconsequence.

For most employees, many factors other thanpay impact motivation and focus; recognition,feedback, opportunities all play their part. Aneffective Performance Management systemtherefore addresses all of these.

HHooww PPiillaatt CCaann HHeellpp -- PPrroocceessss

PPiillaatt hhaass ddeevveellooppeedd aa rraannggee ooff bbeessttpprraaccttiiccee pprroocceesssseess,, ttoooollss,, ssooffttwwaarreeaanndd pprrooggrraammmmeess ttoo hheellppoorrggaanniizzaattiioonnss ddeessiiggnn aanndd iimmpplleemmeenntteeffffeeccttiivvee ppeerrffoorrmmaannccee mmaannaaggeemmeennttpprroocceesssseess aanndd ssyysstteemmss..

PPrroocceessss AAuuddiittss

If it works, don’t fix it. If it doesn’t, do youknow why? Pilat can help clients audit theirperformance management processes beforemaking commitments to change.

Working with our clients using a variety oftechniques and tools, we help organizationsidentify the processes, content, training andsystems that would benefit most fromattention. By this means we can ensure theoptimum return on investment for the fastestachievement of improvement.

By having a holistic and cost effectiveassessment of their PerformanceManagement processes, our clientsare able to:

� Identify strengths and weaknesses.

� Provide evidence to assist seniormanagers in decision making.

� Develop a consensus as to the keypriorities for improvement.

� Target spending on the areas that mostrequire development.

� Identify the extent of process consistencythroughout the organization.

Our range of process audits include:

� PPeerrffoorrmmaannccee MMaannaaggeemmeenntt HHeeaalltthh CChheecckkFrom an organizational holisticperspective.

� MMoonniittoorr PPuullssee WWeebb--bbaasseedd PPMM SSuurrvveeyyCollects multiple individualperspectives.

� MMoonniittoorr PPuullssee™™ AAuuddiitt Includes use ofthe above, plus stakeholder interviewsand focus groups.

HHooww PPiillaatt CCaann HHeellpp -- PPrroocceessss

SSttrraatteeggiicc PPeerrffoorrmmaanncceeMMaannaaggeemmeenntt PPrroocceessss DDeessiiggnn

Pilat has developed a Strategic PerformanceManagement Design Process. This usuallytakes the form of facilitated workshops onthe design and implementation of positiveperformance management processes.

During this process, we challengeconventional wisdom, and incorporatecreative techniques to encourage newthinking. Managing Performance is not asimple task, but the challenge is to designeffective processes and systems that makeit so.

Based on our in-depth experience, we workwith our clients to design effectivePerformance Management processes. Ineach design we ensure that the followingissues are addressed, but configure theprocesses and systems to suit each client’sindividual requirements:

� Direction Setting

� Clarifying Roles

� Planning & Aligning

� Outputs (Goals/Objectives)

� Activities/Behaviours

� Development

� Monitoring & Measuring

� Enabling & Enhancing

� Assessing & Evaluating

� Rewarding & Recognising

PPiillaatt PPeerrffoorrmmaannccee PPoorrttffoolliioo

For those organizations not wishing todeploy technology to underpin theirPerformance Management processes, Pilatoffers the Pilat Performance Portfolio. Thispaper-based process establishes an on-goingperformance management process via whicheach employee builds a performanceportfolio that culminates with a holisticperformance appraisal.

UUssiinngg TTeecchhnnoollooggyy ttoo DDrriivvee aannddSSuussttaaiinn PPeerrffoorrmmaannccee

The most effective performancemanagement processes are designed toseize on the power of contemporarytechnology. Likewise, the most effectivetechnology is configured to support desiredprocesses; not to dictate or restrict them.

Pilat has developed Performance Pulse™, amodule in the HR Pulse® suite of products.Performance Pulse can support virtually anyperformance management process, includingany one or more of the typical performancemanagement components outlined.

HR Pulse® can be rapidly configured toprovide mass user web-based support foreach client’s unique requirements. Despitesometimes extensive configuration, all clientsshare the same core HR Pulse systemarchitecture. Pilat can therefore offerguaranteed upward compatibility, and canassure its clients of the ability to evolve theirsystems continuously as their circumstancesand demands change.

HHooww PPiillaatt CCaann HHeellpp -- PPrroocceessss

As well as being able to quickly andeffectively automate existing appraisalprocesses, Performance Pulse™ can re-engineer these processes so that theydrive behavioural change and contributepositively to business performance. Forexample:

� DDiirreeccttiioonn SSeettttiinngg – Performance Pulse™can integrate any relevant backgroundor other supporting information such ascorporate mission statements, values orkey result areas. It can measure andtrack business as well as individualperformance.

� PPeerrffoorrmmaannccee PPllaannnniinngg – The systemsupports a performance ‘contract’between employees and managers.The contract may define: requiredcompetencies (HOW), objectives andmeasures (WHAT), the timeline (WHEN)and the contributors (WHOM).

� AAlliiggnnmmeenntt – Performance Pulse™facilitates many methods of achievingalignment between individualperformance planning andorganizational need. Tools foridentifying broken chains and fortracking and costing the achievement oforganizational goals canalso be provided.

� DDeevveellooppmmeenntt PPllaannnniinngg – Plans can beidentified and captured in free format ordriven from developmental optionsaligned to competency models.

� PPeerrffoorrmmaannccee MMoonniittoorriinngg //EEvvaalluuaattiioonn– Performance Pulse™ supports ongoingmonitoring and measurement ofperformance and supports ad-hoccomments, journal entries, review ofobjectives upon completion, interimreviews and reviews based on projects.

� RRaatteerr FFeeeeddbbaacckk – Performance Pulse™can help to raise the quality of feedbackby monitoring rating patterns andproviding appropriate prompts orchallenges.

HHooww PPiillaatt CCaann HHeellpp -- PPllaannnniinngg

HHiigghh ppeerrffoorrmmiinngg oorrggaanniizzaattiioonnss sshhaappeeaanndd tthheenn ccoommmmuunniiccaattee aa cclleeaarr sseett ooffssttrraatteeggiicc ggooaallss,, oobbjjeeccttiivveess aannddmmeeaassuurreess ooff ssuucccceessss.. PPrroocceesssseess aarreetthheenn ddeessiiggnneedd ttoo eennssuurree tthhaatt tthheerreeiiss aa lliinnkk bbeettwweeeenn iinnddiivviidduuaall aannddoorrggaanniizzaattiioonnaall ggooaallss aanndd ppllaannss..UUnnffoorrttuunnaatteellyy,, tthheessee pprroocceesssseess oofftteennddoo nnoott wwoorrkk;; tthheeyy ddoo nnoott iimmppaacctt tthheevveerryy ppeeooppllee tthhee pprroocceessss wwaassddeessiiggnneedd ttoo cchhaannggee..

Pilat offers a suite of linked programmes andworkshops, designed to power individualperformance planning.

11.. VViissiioonn,, MMiissssiioonn aanndd VVaalluueess PPrrooggrraammmmeeFacilitation of a program to derive andarticulate the organizational vision,mission and values.

22.. OOrrggaanniizzaattiioonn DDiirreeccttiioonn SSeettttiinngg aannddSShhaarriinngg – Facilitation of high levelworkshop(s) to create and communicatea clear definition of the organizationalgoals, and the values that complementthem.

33.. TTeeaamm//IInnddiivviidduuaall GGooaall SSeettttiinnggWWoorrkksshhooppss Facilitation of a team inshaping its objectives, helping drivedelivery of its part of the strategic plan.

44.. CCrroossss--ffuunnccttiioonnaall AAlliiggnnmmeenntt WWoorrkksshhooppssFacilitation of cross functionalworkshops where participants fromdifferent groups review each other’sobjectives, identify any potentialproblems or shortfalls, and agree howthese will be addressed. At the end ofthis process, all represented parts of theorganisation can be confident that theyare all pulling in the same direction.

55.. HHoolliissttiicc PPeerrffoorrmmaannccee PPllaannnniinnggFacilitation of Performance Planningworkshops designed to enable individualsand their managers to plan holisticperformance: Goals/objectives/behaviours/activities, and development.

HHooww PPiillaatt CCaann HHeellpp -- PPllaannnniinngg

DDrriivviinngg PPeerrffoorrmmaanncceeIImmpprroovveemmeenntt

In high performing organizations, managersand HR analyse the drivers of highperformance against each of the key resultareas. They make direct links betweenperformance outputs and performanceenablers, and make this informationaccessible to employees and their managers.

Development tips and advice are thentargeted at driving improved performance ineach of these enablers. This facilitatesemployees to initiate focused performanceimprovement actions.

A range of services to help organizations toenhance individual and collectiveperformance are available.

11.. JJoobb AAnnaallyyssiiss – We carry out job analysisto identify the enablers/drivers of highperformance. From our work with adiverse number of organizations onPerformance Management, we alreadyhave an insight into the skills/competenciesthat drive key result areas in specific sectors,e.g. customer service and sales in the leisuresector, sales in telecommunications,customer service and staffretention in retail. We use this to helpinform our analysis.

22.. IInnddiivviidduuaall PPeerrffoorrmmaannccee CCooaacchhiinngg – Thisfocuses on enabling individuals to useholistic performance planning as the basisfor targeted behavioural change.Individual development is used to drivesustainable on-job performanceimprovement.

HHooww PPiillaatt CCaann HHeellpp -- SSkkiillllss DDeevveellooppmmeenntt

IInnddiivviidduuaall ppeerrffoorrmmaannccee iiss oofftteennddeessccrriibbeedd aass tthhee rreessuulltt ooffooppppoorrttuunniittyy,, ccaappaabbiilliittyy aannddiinncclliinnaattiioonn.. PPiillaatt ooffffeerrss aa ssuuiittee ooffttrraaiinniinngg mmoodduulleess tthhaatt aaddddrreessss aallll tthheeccoorree ccaappaabbiilliittyy sskkiillllss ooff PPeerrffoorrmmaanncceeMMaannaaggeemmeenntt..

We can deliver programmes of varyinglength to match the specific skills needs ofthe organization and the target audience.The modules are very practical and weprovide easy-to-apply tools and techniquesto support skills improvement.

There are work-related activities that reflectthe participants’ day-to-day responsibilitiesand we include multiple opportunities for theparticipants to practice and receive feedbackon their skills, in order to embed thelearning.

Our training modules cover the followingareas:

� Direction Setting

� Direction setting and sharing

� Clarifying Roles

� Role clarification – job

� Delegation

� Managing individual and teamperformance

� Planning Performance

� Output goal setting and alignment

� Activity/behaviour planning

� Development goal setting andplanning

� Defining measures, standards andtargets

� Monitoring & Measuring Performance

� Observing performance

� Measuring and recording performance

� Creating a performance portfolio

HHooww PPiillaatt CCaann HHeellpp -- SSkkiillllss DDeevveellooppmmeenntt

� Enabling & Enhancing Performance

� Empowering

� Giving feedback

� Counselling/directing/coaching/supporting

� Assessing & Evaluating Performance

� Evaluating performance

� Enhancing performance assessments

� Rewarding & Recognising Performance

� Reward

� Recognise

� Positive Performance Management.

HHooww PPiillaatt CCaann HHeellpp -- CCrreeaattiinngg aa PPeerrffoorrmmaannccee CCuullttuurree

CCrreeaattiinngg aa PPeerrffoorrmmaannccee CCuullttuurree iissssoommeetthhiinngg wwhhiicchh PPiillaatt ccaann wwoorrkk iinnppaarrttnneerrsshhiipp wwiitthh yyoouurr oorrggaanniizzaattiioonn ttooaacchhiieevvee.. TThhiiss ppllaayyss aa vviittaallllyy iimmppoorrttaannttppaarrtt iinn aattttaaiinniinngg yyoouurr ggooaallss,, aass iitt ffoorrmmsstthhee bbaassiiss oonn wwhhiicchh yyoouurr ppeerrffoorrmmaanncceemmeeaassuurreess wwiillll ssuucccceeeedd oorr ffaaiill..

We can help you to achieve your goals bycreating a tailored programme designed toengage your employees in how theorganization as a whole can improve results,through better performance. An example ofhow this has been implemented is outlined inthe following case study.

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Like many companies our client continued tobe impacted by the rising costs of fuel andraw materials. In 2007 however, after a periodof financial cutbacks, the company embarkedon a journey for sustainable profitablegrowth. Leaders of the organization built aformidable 7 pillar strategy. At the heart ofthis strategy was a plan to cultivate a highperformance culture that would help theorganization to achieve its ambitious goals.

TThhee CChhaalllleennggee

Pilat were invited to design and deliver aprogramme which would equip leaders tobuild the desired culture and inspirecommitment to the organization’s goals.The challenge was to create a cost effectivedevelopment programme which would resultin genuine behavioural and cultural change,and produce visible financial payback to theorganization.

TThhee SSoolluuttiioonn

The outcomes to be achieved were clarifiedunder the approval of the CEO. Working inpartnership, Pilat designed a high impactbehavioural change programme with 5 keyelements, including: a pre-programme measure(360° feedback), an intensive 3 daydevelopment intervention workshop, a follow-up day 8 weeks after the workshop to maintainmomentum and allow sharing of progressmade, support & accountability by assigning anexecutive sponsor to each programme, and apost-programme re-measure 6/8 months afterthe workshop to establish and report on thechanges.

IImmpplleemmeennttaattiioonn

At the time of publishing, Pilat has delivered 5workshops with 55 senior leaders in total. All 5workshops have been sponsored by anExecutive Team member, and delivered inpartnership.

RReessuullttss

The client has added £500K additional profit totheir bottom line in 8 weeks, and achieved a10% shift in targeted leadership behaviours.

The programme has released a network ofleaders passionate about the business and ableto identify the behaviours required to cultivate ahigh performance culture.

The leaders of the organization are able tosupport each other on personal and businessdevelopment and are eager to coach anddevelop their teams.

HHooww PPiillaatt CCaann HHeellpp -- DDaattaa AAnnaallyyssiiss

PPeerrffoorrmmaannccee MMaannaaggeemmeenntt pprroocceesssseesspprroodduuccee llaarrggee vvoolluummeess ooff ddaattaa,, yyeettmmuucchh ooff tthhiiss iiss nnoott ttyyppiiccaallllyy uusseedd..PPiillaatt wwoorrkkss wwiitthh iittss cclliieennttss ttoo ooppttiimmiisseetthhee uussee tthhaatt iiss mmaaddee ooff ddaattaa,, aass wweellllaass ttoo iinnccrreeaassee tthhee qquuaalliittyy aanndd tthheeeexxtteenntt ttoo wwhhiicchh iitt ccaann bbee uusseedd..

Pilat provides:

� Internal/external benchmarking

� Validating competency models

� Analysis of correlations between

� Competency assessments andindependent measures of output, cultureand/or satisfaction

� Appraiser Feedback (Individual/Off-line)

Comparative analysis of multipleassessments by an appraiser looking at:

� Potential harshness/leniency

� Differentiation between factors

� Differentiation between performers

� Appraiser Feedback (Individual/ Real-time)

Real-time rater feedback covering:

� Use of scale

� Potential harshness/leniency

� Differentiation between factors

� Differentiation between performers

� Correlations between e.g. 360 degree, appraisalsand survey results

Such correlation studies can testperformance hypotheses and identifypotential cause-effect relationships.

PPeerrffoorrmmaannccee mmaannaaggeemmeenntt iiss aa ssttaattee ooff mmiinndd,, nnoott aa sseett ooff ffoorrmmss..

PPiillaatt HHRR SSoolluuttiioonnss is an integrated human resources consultancy & IT systems solutiondeveloper. Our mission is to enable our clients to optimise the HR processes provento underpin superior organizational performance.

For 30 years, our business psychologists have been leading best practice in allaspects of Talent & Performance Management, Organizational & ManagementDevelopment, 360 Degree Feedback®, Metrics, Job Evaluation & Reward.

Our experts combine a deep understanding of people management andorganizational development issues with the opportunities provided by advancedtechnology. Our flexible in-house or fully hosted systems turn theory into practice.Pilat produces results.

We have unrivalled expertise in the objective and rigorous analysis of HR data,processing more than half a million assessments per year, in over 14 differentlanguages.

Pilat HR Solutions has a wide and varied client base including major globalcorporations and public sector bodies. We work across all sectors with organizationsfrom a few hundred to hundreds of thousands of employees. We have a solid trackrecord for developing tailored solutions that deliver improved performance and showimpressive returns on the investment made.

PPiillaatt HHRR SSoolluuttiioonnss iiss lliisstteedd oonn tthhee TTeell AAvviivv SSttoocckk EExxcchhaannggee aass PPiillaatt TTeecchhnnoollooggiieess IInntteerrnnaattiioonnaall LLttdd..

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360 Degree Feedback is a registered trademark of Pilat Europe Ltd.

© Pilat Europe Limited 2008

PPiillaatt EEuurrooppee LLiimmiitteedd29 Hendon LaneLondon N3 1PZUnited KingdomTelephone: +44 20 8343 3433Fax: +44 20 8343 4656E-mail: info@pilat.com

PPiillaatt NNoorrtthh AAmmeerriiccaa IInncc..496 Route 22 WestLebanon NJ 08833USATelephone: +1 800 338 9701Fax: +1 908 823 9438E-mail: info@pilat-nai.com